An interesting confluence of events occurred about four months ago. Billboards that had dominated the central parts of New Delhi, espousing India’s commitment to powering growth through clean energy and solar power started to come down. Around the same time, Piyush Goyal, amongst the most able and efficient ministers in Prime Minister Narendra Modi’s cabinet, charged with leading the Ministry of Power, Ministry of New and Renewable Energy, and Ministry of Coal had his area of jurisdiction switched to the Ministry of Coal and Ministry of Railways. It was during this time, that Indian international rhetoric regarding its renewable energy ambitions also began to taper out.
The policies and allocations that were announced in Budget 2018, serve to seemingly provide confirmation of the facts that have been apparent over the past quarter of a year. India, which has often portrayed itself as a leader in the battle against climate change, is in fact doing the exact opposite.
There were three major announcements made in Budget 2018, with regards to climate change. The first was an interesting throw-away line, sandwiched in the Agriculture and Rural Economy portion of Finance Minister Arun Jaitley’s speech. He announced that state governments and their power distribution companies would be “encouraged” to buy any excess renewable energy power produced by small farmers at “reasonably” remunerative rates.
It is an interesting and important proposal – one of the major drawbacks of renewable energy is the variability of the power production, which often leads to excess loss when power distribution companies (Discoms) have met demands from other energy sources. The announcement of the proposal is undoubtedly an encouraging climate mitigation step.
The speech did not, however, contain any mention of other more essential base climate mitigation issues, such as the scaling up rooftop solar, measures to curtail transmission and distribution losses, implantation of smart grids, and of course the revamping of the discoms. It will be interesting to see how discoms, chronically afflicted by financial distress as they are, will be able to purchase this excess solar power.
The second mention of climate related Budget item was the declaration of Rs 2.04 lakh crore for Smart Cities. Once again, Smart Cities are an important part of the fight against climate change – they can be one of the keys to reducing waste management and transportation related carbon emissions. Those two factors, however, only make up 13.5 percent of India’s national emissions. The Budget makes no mention of climate mitigation measures focused on the power sector, which make up more than half of India’s greenhouse gas emissions, with the exception of the proposal mentioned in the previous paragraph.
The third mention of climate related Budget item was the declaration of Rs 60 crore for climate resilient infrastructure. Once again, in a vacuum, the declaration is good news from a climate change perspective — building resilient infrastructure is an important part of a country’s low carbon transition. For India to focus that amount on climate resilience, rather than mitigation, however, is an interesting signal.
Looking at the fine print of the Budget speech makes the decision seem even more curious – the Rs 60 crore does not seem to be going to infrastructure development which can have a theoretical trickledown effect on the economy. It is focused, instead on developing standards, regulations and international best practices that will define what climate resilience is. In view of some of the fundamental climate issues that the Budget seemingly ignores, the item is akin to a bald man buying a comb.
It is possible, of course, that there are policies or climate mitigation measures implemented within the Budget that were not highlighted by Jaitley. A quick look at the available numbers shows that capital outlays towards the Ministry of New and Renewable Energy have increased by 8% from the previous budget.
It should be noted, however, that actual expenditure on environment and renewables has not only been less than the budgeted expenditure, it has also declined over the same time. Given the historical precedence and the current rhetoric, it seems that the government has decided that fighting climate change is no longer one of their priorities.
(Aparajit Pandey is a programme co-ordinator with the Observer Research Foundation. His research focuses on the intersection of economics, finance and climate change.)